The Bond That Walks Like a Bear

Like the strains of a waltz from old St. Petersburg, the dollar bonds of Czar Nicholas II's Russian Imperial Government have been haunting Wall Street for more than 30 years. At the time of the Czar's execution in 1918 some 75,000 of the bonds, each with a face value of $1,000, were floating around the U.S. One of the first acts of the Soviet government was to repudiate them, and they have never been worth a kopeck since. Yet U.S. speculators have never tired of trading in them and the bonds have kept some market "value"—based on nothing but hope that Russia some day will redeem them.

In the bull market of 1942-46, when hopes for Russian-U.S. harmony reached their post-revolution high, the bonds soared from $2.50 to $220—an incredible 8,700%. By early this year, the cold war had chilled them back to $20. But last week, when Winston Churchill and others suggested new talks with Stalin, hope surged once more through the trade in Russian "Imperials." In a single day's trading, the bonds accounted for about 80% of all bond trading on the New York Curb Exchange; at week's end they were selling for $32.50.